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Crop weather improving in Argentina
A quick look at medium and long-range models seems to indicate a continuation of a cooler and wetter pattern for northern Argentina. Upon news of better weather and timely rainfall across Argentina yesterday, soybean futures dropped 30 cents. Obviously, South American weather will be one of the largest influences on bean prices in the coming weeks.
That said, what kind of weather do we expect over the next several weeks in the key productivity regions of SA? In order to address this question, let's take a look at our sea surface temperatures (sst) across the equatorial Pacific Ocean. Over the last few weeks, sst in the central Pacific have dropped significantly, dipping as low as 1.2 degrees below normal on the 16th of the month. The latest weekly ENSO issue from the Climate Prediction Center (CPC) indicates weekly sst have bottomed out near 0.7 C. below normal.
For reference, La Nina is classified as having sst 0.5 C. below normal or lower, for five consecutive three-month intervals. Why have sea surface temperatures cooled so much across the central Pacific? Upon close examination, it appears two culprits may be responsible. First, the MJO has gone quiet the past few weeks, lessening its control over the predominant weather patterns across the central Pacific. Second, a strong Kelvin wave travelled west to east across the equatorial Pacific, upwelling cold water from the subsurface as it departed, allowing for sharp drops in oceanic temperatures near the surface.
This abnormal drop in sst has coincided with a very hot and dry pattern across Argentina. The past few days, however, sst have rebounded closer to normal, with northern Argentina simultaneously experiencing the emergence of a wetter pattern. Since Pacific sea surface temperature patterns (ENSO), are historically known have significant impacts on Argentine weather patterns, it does seem that at least some causal factors are at play between sea surface temperatures and the state of the climate in Argentina.
With that being said, most climate models indicate near normal to slighlty above normal sst in the Nino 3.4 region of the Pacific over the next several weeks. At face value, this supports continuation of wetter weather for northern Argentina. A comprehensive look at recent runs from our climate models indicates relatively good agreement exists between long-range European ensembles and the past few runs of the CFS. The consensus seems to be consolidating on a wetter pattern continuing through the first few weeks of February for northern Argentina, favoring northern Buenos Aires and eastern Cordoba, north and east through northern Santa Catarina and southern Parana.
Meanwhile, a recurring signal exists for unusually dry weather across southern La Pampa on westward, with another axis of drier than normal weather centered from Sao Paulo north through Goias and Minas Gerais. Closer to normal rainfall is expected across Mato Grosso and Mato Grosso do Sul. If the weather pattern unfolds as current models are indicating, growing conditions will improve for much of the Argentine soybeans, with eastern portions of the corn crop also seeing improved conditions.
Yield prospects also look positive for most of Brazil, although late-maturing soybeans in Sao Paulo, Goias, and Mineas Gerais may see detrimental impacts should a drier pattern unfold. Heading into summer, the recent drop in sst seems to have had no impact on strong model consensus for borderline El Nino conditions developing by mid-to late summer.
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